Licensed cargo agents have exclusivity only in customs restricted areas

A licensed cargo agent may be allowed to pick up merchandise from restricted areas controlled by the Customs Department. But in other areas, others may do the same work. This was held in a judgment delivered by the First Hall of the Civil Court presided by Judge Anna Felice on 9 October 2024. The Parties to the case were Carmelo Meli Limited vs Tax Commissioner.

The plaintiffs explained in their sworn application that they are a licensed cargo clearance and forwarding agent and they form part of the Burdnara Bulk Cargo Group. Article 3 of the Cargo Clearance and Transport Act, states:

“No person shall act as a cargo clearance and forwarding agent except under and in accordance with a customs permit granted in that behalf by the Comptroller”

Article 9 allows the cargo agent to transport merchandise in and out of customs shed and bonded stores. The Plaintiffs pointed out that another company which imports cement are allowed to transport the cement contrary to what is stated in the Act. The Burdnara Bulk Cargo Group have complained on this to the Customs Department. So far, they have been ignored by the Department since 2017 when the Group presented a judicial protest. The Plaintiffs argued that this constitutes dereliction of duty since the Department is meant to make sure that the law is observed. In fact, the Plaintiffs asked the Court to hold the Defendant responsible for its failings and order it to pay damages.

The Commissioner for Taxes, which now encompasses the Customs Department filed a statement of defence. It first argued that it was not an interested party to this case. On the merits of the case, the Commissioner held that the permits that cargo agents have is for them to make declarations to the customs department and to withdraw merchandise. The customs department administers a number of properties which are listed in the subsidiary legislation of the Customs Ordinance. Cement is stored at Coal Wharf and this is not listed in the subsidiary legislation 37.05. Consequently, it has no control over who enters Coal Wharf and picks up the merchandise.

The Plaintiffs quantified the damages suffered to €202,951.

The evidence showed that a non-Maltese company, Eurochem imports cement to Malta and sells it to the Maltese market. The General Workers Union also testified in the case and held that Inter Cement, which is not part of the proceeds, imports 35% of the cement market. The company is a cargo agent itself and therefore, this is having a negative impact on licensed cargo agents.

The Customs Department testified and explained that wharf where cement is unloaded is not controlled by it and therefore, it has no control on who goes in and out of the area. When this issue was raised, the law was amended in 2021.

As to the issue of whether the Commissioner of Taxes has a juridical interest in this case the Court held that it had because this is a damages cases since the plaintiffs are alleging that the Commissioner did not follow the law. Therefore, the Commissioner has a juridical interest in the case.

As to the merits of the case, the Court held that the period in which the Plaintiffs are stating that they suffered damages, Fuel Wharf was not a customs area as listed in the law. Following complaints lodged, the law changed in 2021 to include Fuel Wharf as a customs area. The Court also took a point mentioned by the Commissioner of Taxes that according to European Union law the transport of merchandise in public roads does not require a licence. However, the issue at stake is not about public roads, but in a particular area such as the customs area. This issue does not concern the free movement of goods in Malta but who may enter restricted zones. As to Article 9 of the Cargo Clearance and Transport Act, this relates to a licensed cargo agent that may withdraw cargo from the customs restricted areas, unless it is the owner of the merchandise. The court emphasised that the law provides that this is limited to restricted areas controlled by the Customs Department. However, at the time Fuel Wharf was not such a restricted area.

There is no law binding the department to regulate what is going on in public spaces. The laws allow the minister responsible for customs to make regulations on the work carried out by licensed cargo agents. Therefore, it is the minister who has the authority to make regulations on this matter and not the Customs Department.

The Court then moved to turn down the Plaintiffs requests.